First-To-File Patents: Derivation Proceedings

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With a "First-To-File" Patent System, an opportunity for patent theft is opened up, allowing someone to "steal" an unpatented idea and file for patent protection. To combat this problem, the new legislation includes something called a "Derivation Proceeding".

Replacing the current first-to-invent priority system with a first-to-file system creates an issue concerning parties who may steal the inventions of others and subsequently claim patent protection by filing first.  To resolve this issue, the proposed Patent Reform Act of 2011 intends to replace what would then be an obsolete interference proceeding with a derivation proceeding.

Exceptions to First to File and Time Limit

The Act proposes an exception to the first-to-file priority for disclosures made up to one year prior to an inventor's filing date by someone who obtained the subject matter directly or indirectly from the inventor without authorization.  Additionally, the statute of limitations for seeking relief from the wrongdoer would be one year after the issuance of the patent containing the derived invention.

Although this is a noble effort to foreclose the potential for abuse of a first-to-file priority system, the proposed legislation does not jibe with the realities of enforcing an inventor’s rights against such wrongdoers. 

Proving the Case

Under the proposed legislation, an inventor seeking relief from the wrongdoer has the burden of proving that the wrongdoer derived the invention from the inventor’s work.  In order to meet this burden, however, the inventor needs access to the documents in the possession of the wrongdoer, and unfortunately, the United States Patent and Trademark Office has no subpoena powers. 

In contrast, the inventor in the current first-to-invent priority system has possession of the evidence necessary to prove diligence as well as the dates of conception and reduction to practice.  Unless this evidentiary problem is addressed, those with the resources to quickly file will ultimately prevail regardless of whether they were truly the inventors.